Former official gets OK to fight sales tax

SACRAMENTO - A former state lawmaker from Stockton received a green light Wednesday from a federal judge to challenge the city's 3/4-cent sales tax measure headed for the Nov. 5 ballot.

Scott Smith

SACRAMENTO - A former state lawmaker from Stockton received a green light Wednesday from a federal judge to challenge the city's 3/4-cent sales tax measure headed for the Nov. 5 ballot.

Stockton officials seek passage of Measure A, which they say will allow the city to hire 120 more police officers under the Marshall Plan on Crime and help pay the city's way out of bankruptcy.

But Dean Andal, a former state assemblyman, accuses the City Council of trying to deceive voters with language that will appear on the ballot under Measure A by making claims that they can't legally back up.

He says that the proposed general tax requires a simple majority from the voters, a threshold that doesn't allow the city to earmark for any designated use some $28 million expected to be raised in its first year, if it passes.

Only a special tax, with two-thirds of voter approval, can allow the city to put restrictions on the revenue, Andal contends.

"The measure ... is a 'general tax' being disguised as a 'special tax,' " Andal's attorneys argue in the 13-page court document. "Nowhere in the title to the measure is the word 'tax' even mentioned."

Andal's attorney, Joseph Speaker of the Roseville law firm of Koeller, Nebeker, Carlson & Haluck LLP, said he planned to lodge the challenge with the San Joaquin County Superior Court in Stockton on Wednesday.

He first needed permission from U.S. Bankruptcy Judge Christopher Klein, because a provision of Chapter 9 law suspends litigation. Klein granted the motion to lift the stay in Andal's case.

Stockton spokeswoman Connie Cochran said that a pre-eminent elections law firm helped the city craft the ballot language. She said it is defensible in court.

"This measure is critical to addressing our crime issues and exiting and recovering from bankruptcy," she said. "We're confident in the ballot language."

The tax increase is a critical piece of Stockton's financial recovery plan, because upon filing for bankruptcy on June 28, 2012, the city suspended millions of dollars worth of bond payments.

The city is negotiating behind the scenes with its creditors and crafting a plan of adjustment, which Stockton's lead bankruptcy attorney, Marc Levinson, said he will file in September.

To exit bankruptcy, the city needs to resume payments in a restructured plan, which creditors agree to accept. Levinson is also preparing a "cramdown" plan in case some creditors do not agree to the city's terms.

Passing the city's tax hike also is not a given. In addition to Andal's objection, the San Joaquin Taxpayers Association has come out against Measure A.

Association President David Renison said that his organization is not part of Andal's litigation but his members contend that there are no guarantees the city will follow through on its promise to hire more police.

"We are in total agreement with any effort that would force the city to present the ballot measure in such a way that even uninformed voters understand the consequence of such a tax," Renison said. "We are opposed to this taxation."